Two well-known oil and gas names appear in court

Two well-known oil and gas names appear in court
Oil rig in the Permian Basin. (Source: KWES)

MIDLAND, TX (KWES) - The Mesa Petroleum Partners LP vs. Baytech LLP, Patriot Resources Inc. trial got under way this week in West Texas.

These Midland based companies allegedly violated terms of a decade long investment contract that was potentially worth $1 billion.

According to court documents, Mesa accused these companies of breach of contract, breach of fiduciary duty, tortuous interference with contract and fraud.

This deal started in January 2007 when Mesa, Baytech and the other entitled companies signed a participation agreement.

Under this agreement, Baytech was required to offer Mesa the opportunity to participate in every interest in minerals that Baytech acquired within a defined area of mutual interest between Jan. 2007 and Jan. 2012.

Mesa had the right to participate in 15 percent of each acquisition, plus the right to participate in each well that was drilled in the acquired areas.

Baytech and Patriot made an offer in March of 2009 to buy out Mesa's interest in the participation agreement and related contracts and properties. The offer was never accepted by Mesa.

After the declined offer, Mesa received no further participation notices, even though it retained all of its rights and interests in agreement.

Court documents say that the defendants took the new acquired interests and wells for themselves, cutting Mesa out of the deal.

Mesa believes they should have been offered the right to participate in the new interests and wells.

The trial is located in Pecos and jury selection was said to have begun on Monday.

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